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Leaders Should Have Skin in the Game

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Even Elon has failed:

Elon Musk was a nervous wreck.

The entrepreneur many today consider the next Steve Jobs hardly seemed like a visionary genius in 1995 when he stood uninvited in the lobby of Netscape Communications' headquarters in Mountain View, trying to muster enough courage to launch a career.

Fresh out of college with degrees in physics and economics, the 24-year-old Musk had already tried e-mailing the company his resume. Netscape, makers of the first mass Web browser, never replied. So Musk, who had left his native South Africa to find a tech job, showed up in person. But he was too shy to approach anyone.

"What am I going to say: 'Please give me a job'?" Musk recently recalled. "They'd be like, 'Call security - there's this weird kid here.' "

He left empty-handed.

The image of Musk retreating from Netscape seems hard to reconcile with a self-made billionaire who now speaks about colonizing Mars. But success, especially repeated success, has a way of silencing doubt, even among those around you.

"I've seen those situations where it makes sense to push people beyond what they think they can do, because usually people can do more than they realize," Musk said in an interview. "When the company's life is at stake, everyone has to work as hard as possible. Anything less than that seems crazy to me."

He could have easily been wiped out:

Musk plowed the proceeds into SpaceX, founded in 2002, and Tesla, born the following year. Each flowed from one of his long-term passions. Space had fascinated him since childhood. He had been talking about electric cars since college, convinced the world needed them to fight climate change.

And yet, at times he thought both companies would fail. They were, at the very least, long shots.

"I didn't know how to build rockets, or build anything really," Musk said in February, at a forum in San Francisco on innovation. "What are the odds of a new car company succeeding? Pretty darn low."

The first three rockets launched by SpaceX failed. Tesla, meanwhile, got caught in the financial collapse of 2008, which hit just as the company was seeking money to open a factory for what would become the Model S. By year's end, Musk faced a stark choice: sink what was left of his capital into Tesla and SpaceX, or let both companies die. Complicating matters, he was in the midst of a painfully public divorce from his first wife, Justine Musk, whom he had met and pursued at Queen's University.

Musk decided to double down, going into debt to raise money for Tesla.

"In a sense, he bet the house," Jurvetson said. "Tesla Motors would not exist today if Elon Musk did not personally save it in the bravest, boldest step I've seen an entrepreneur take, bar none."

Musk now calls the decision "a no-brainer," although failure would have wiped him out. The real decision, he said, was whether to split his capital between Tesla and SpaceX, or try to save one company while watching the other die. He chose the split.

"Both companies narrowly made it, but it could easily have been the case that both companies starved to death," Musk said.

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